[ad_1]
\n<\/p>\n
\nConsumer borrowing surged in July at its fastest pace since late 2017, driven by a big jump credit card use.<\/p>\n
\nConsumer borrowing increased by $23.3 billion in July after a $13.8 billion advance in June, the Federal Reserve reported Monday. It was the biggest monthly gain since a $29.9 billion jump in November 2017.<\/p>\n
\nThe large July gain was led by a sizable increase in borrowing in the category covering credit cards, which rose by $10 billion in July after having fallen by $186 million in June.<\/p>\n
\nBorrowing in the category that covers auto and student loans also posted a sizable gain, rising by $13.3 billion in July following a $14 billion June increase.<\/p>\n
\nConsumer borrowing is closely watched for signs it provides about consumer spending.<\/p>\n
\nThe economy has encountered headwinds this year in areas such as manufacturing and export sales, reflecting uncertainties caused by President Donald Trump’s trade war with China and a slowing global economy.<\/p>\n
\nBut those adverse shocks have been cushioned by strength in consumer spending, which accelerated in the spring to the fastest pace in five years after a weak start to 2019. Consumer spending accounts for about 70% of U.S. economic activity.<\/p>\n
\nEconomists are looking for household spending to continue to be solid for the rest of this year, helped by rising wages and the lowest unemployment rate in nearly a half century.<\/p>\n
\nThe overall economy, as measured by the gross domestic product, grew at a 3.1% rate in the first quarter, reflecting some special factors, but slowed to growth of 2% in the April-June quarter. Economists are forecasting GDP growth will average around 2% in the second half of this year.<\/p>\n
\nThe July increase pushed total consumer credit to a record $4.1 trillion. The Fed’s monthly credit report does not cover mortgages or any other debt secured by real estate such as home equity loans.<\/p>\n<\/div>\n